Apple will contribute over $350 billion into US economy over the next five years

Earlier this year Apple announced that it will be contributing $350 billion into the US economy over the next five years. 

The investments will concentrate on three areas: direct employment by Apple, spending and investment with Apple’s domestic suppliers and manufacturers, and the digital App Store economy.

Ony $75 billion of that total number will come from capital expenditures, new investments in manufacturing, and its repatriation tax payment. The rest of the number is due to normal growth and spending.

Apple CEO Tim Cook commented in the announcement that “We believe deeply in the power of American ingenuity, and we are focusing our investments in areas where we can have a direct impact on job creation and job preparedness. We have a deep sense of responsibility to give back to our country and the people who help make our success possible.”

Brexit business summary

The stock market and the pound have managed to regain some ground with the FTSE 100 index now at a loss of only 1.9pc and FTSE 250 up by 7.3pc. The pound is now at $1.37899 after falling to $1.3236. Financial institutions and homebuilders have been hit hardest with companies such as Barclays, Lloyds Bank and Bovis Homes experiencing losses of around 20%. Global companies still remain concerned about potential need for job cuts and loss of profits in the region. Simon Walker, director-general of the Institute of Directors said earlier, “… top priority is placed on negotiating a new arrangement that gives UK companies access to the single market, and the much-needed skills of EU workers.”


Japan Avoids Recession As Consumer Spending Rises

Japan has avoided falling into a recession as its GDP grew at an annualized rate of 1.7% in the first quarter of 2016. Whereas business investment fell 1.4%, consumer spending rose 0.5% compared to the previous quarter. Higher government spending also helped offset the effect of lower business investment. The economic growth rate was better than analysts had expected, and it comes at a time when Japanese policymakers are trying to reduce the country's debt burden relative to GDP. Prime Minister Shinzo Abe has also announced a plan to increase the Japanese workforce with over a million people by 2020.


US Federal Reserve Keeps Interest Rates On Hold

The US central bank has decided to hold interest rates at a range between 0.25% and 0.5%, arguing inflation still remains below its 2% target. However, the Fed removed a previous reference to global economic risks from its April statement, which many analysts interpreted as potentially signalling an interest rate increase at the next meeting in June. The Federal Open Market Committee (FOMC), which makes key decisions about US interest rates, also said the Fed funds rate is expected to remain for some time below anticipated levels over the longer run. In terms of US labour market conditions, the FOMC said they have improved, although GDP growth appears to have slowed.


UK Industrial Output Drops

The Office for National Statistics estimates the UK's total production output has decreased by 0.5% in February 2016 compared to 2015. This is the largest decline in industrial output since August 2013, and it was fueled by the manufacturing sector, which slumped 1.8%. Out of the 13 manufacturing sub sectors, 11 of them had falling output, with the manufacture of transport equipment showing the biggest decline of 2.9%. These statistics adds fears over the growth of the UK economy. The preliminary estimate of UK GDP growth for the first quarter of 2016 is set to be released on 27 April.


US Economic Growth Adjusted Upward

The US Commerce Department has revised its estimate of US economic growth in Q4 2015 to 1.4% on an annualised basis, up from its previous estimate of 1.0% issued in February. For 2015 as a whole, real GDP increased at a rate of 2.4%, the same figure as the year before, primarily reflecting positive contributions from residential investment, inventory investment, exports, and government spending. The GDP growth rate in the fourth quarter was higher than analysts had expected, and it is a factor the Federal Reserve is likely to pay attention to in its next interest rate decision in April.


Moody's Downgrades Hong Kong Outlook

Credit rating agency Moody's has cut its outlook on Hong Kong's long-term rating from 'stable' to 'negative', arguing the credit profile of the autonomous territory will continue to track that of mainland China. The downgrade follows a similar outlook change on Chinese government debt, which was cut to 'negative' on March 2, primarily due to a weakening fiscal position, concerns over growing debt levels, and institutional challenges related to maintaining economic growth and implementing reform. Moody's estimates Chinese government debt has risen from 32.5% of GDP in 2012 to 40.6% at the end of 2015, and the rating agency expects that figure to increase to 43% by 2017.